Kura Sushi Usa, Inc. (NASDAQ: KRUS)

Sector: Consumer Cyclical Industry: Restaurants CIK: 0001772177
Market Cap 640.46 Mn
P/B 2.77
P/E -336.38
P/S 2.26
ROIC (Qtr) -1.18
Div Yield % 0.00
Rev 1y % (Qtr) 20.35
Total Debt (Qtr) 170.02 Mn
Debt/Equity (Qtr) 0.74

About

Kura Sushi USA, Inc., commonly known as KRUS, operates in the restaurant industry, specifically offering a technology-enabled Japanese dining experience. With 54 locations spread across 15 states and Washington D.C., Kura Sushi is a subsidiary of Kura Sushi, Inc., a Japan-based revolving sushi chain that boasts over 500 restaurants and four decades of brand history. Kura Sushi's main business activities revolve around providing an innovative dining experience through its "Kura Experience." This unique concept combines elements of beautifully crafted...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 47.50M provide 3.37x coverage of short-term debt 14.08M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 430.94M provides 2.53x coverage of total debt 170.01M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 24.71M provides exceptional 353.01x coverage of interest expenses 70000, showing strong debt service capability.
  • Robust tangible asset base of 430.94M provides 13.19x coverage of working capital 32.67M, indicating strong operational backing.
  • Short-term investments of 14.96M provide solid 2.36x coverage of other current liabilities 6.33M, indicating strong liquidity.

Bear case

  • Operating cash flow of 24.71M barely covers its investment activities of (93.72M), with a coverage ratio of -0.26, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • High receivables of 6.54M relative to inventory of 2.14M (3.05 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of (24.14M) provides weak coverage of capital expenditures of 48.85M, with a -0.49 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (1.66M) show weak coverage of depreciation charges of 14.05M, with a -0.12 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 14.05M relative to operating cash flow of 24.71M, which is 0.57x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Restaurants
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MCD Mcdonalds Corp 222.05 Bn 26.39 8.45 55.82 Bn
2 SBUX Starbucks Corp 95.51 Bn 51.45 2.57 26.61 Bn
3 CMG Chipotle Mexican Grill Inc 50.94 Bn 33.15 4.32 4.98 Bn
4 YUM Yum Brands Inc 43.17 Bn 29.83 5.36 11.55 Bn
5 QSR Restaurant Brands International Inc. 22.43 Bn 24.33 2.42 15.64 Bn
6 DRI Darden Restaurants Inc 21.91 Bn 19.91 1.77 6.16 Bn
7 YUMC Yum China Holdings, Inc. 18.12 Bn 20.05 1.57 1.84 Bn
8 DPZ Dominos Pizza Inc 14.57 Bn 24.72 3.01 5.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.76 2.05
EV to Cash from Ops. EV/CFO 30.73 16.57
EV to Debt EV to Debt 4.47 4.75
EV to EBIT EV/EBIT -457.72 3.45
EV to EBITDA EV/EBITDA 81.78 9.76
EV to Free Cash Flow [EV/FCF] EV/FCF -31.46 29.06
EV to Market Cap EV to Market Cap 1.19 6.55
EV to Revenue EV/Rev 2.69 2.40
Price to Book Value [P/B] P/B 2.77 -1.40
Price to Earnings [P/E] P/E -336.38 13.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -9.56
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 18.72
Dividend per Basic Share Div per Share (Qtr) 0.00 0.84
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 30.41
Interest Coverage Int. cover (Qtr) -23.70 -86.85
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -8.66 -24.56
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -6.84 35.50
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.72
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 79.14 -564.81
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 3,192.55 25.78
EBIT Growth (1y) % EBIT 1y % (Qtr) 80.69 -507.68
EBT Growth (1y) % EBT 1y % (Qtr) 79.98 -41.98
EPS Growth (1y) % EPS 1y % (Qtr) 79.75 -126.51
FCF Growth (1y) % FCF 1y % (Qtr) 17.74 5,724.78
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 13.25 23.70
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.66 0.99
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 1.11 0.78
Current Ratio Curr Ratio (Qtr) 1.76 1.47
Debt to Equity Ratio Debt/Equity (Qtr) 0.74 0.05
Interest Cover Ratio Int Coverage (Qtr) -23.70 -86.85
Times Interest Earned Times Interest Earned (Qtr) -23.70 -86.85
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 4.40 7.71
EBIT Margin % EBIT Margin % (Qtr) -0.59 -2.27
EBT Margin % EBT Margin % (Qtr) -0.61 -1.97
Gross Margin % Gross Margin % (Qtr) 11.80 34.04
Net Profit Margin % Net Margin % (Qtr) -0.70 -3.69